BILL NUMBER: AB 2891	CHAPTERED  09/26/00

	CHAPTER   646
	FILED WITH SECRETARY OF STATE   SEPTEMBER 26, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 24, 2000
	PASSED THE SENATE   AUGUST 22, 2000
	PASSED THE ASSEMBLY   MAY 3, 2000

INTRODUCED BY   Committee on Revenue and Taxation (Knox (Chair),
Alquist, Aroner, Ducheny, Honda, and Romero)

                        MARCH 9, 2000

   An act to amend Sections 75.11, 75.21, 532, 731, 732, 733, 746,
748, 749, 758, and 759 of the Revenue and Taxation Code, relating to
taxation.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2891, Committee on Revenue and Taxation.  Property taxation.
   Existing law with respect to supplemental property tax assessments
specifies various limitation periods for assessments on the
supplemental tax roll.  Existing law also provides that these
limitations periods do not commence unless certain filings or
transmittals occur.
   This bill would eliminate this latter provision and would require,
if a change in ownership is unrecorded and a change in ownership
state or preliminary change in ownership report is not filed, that a
supplemental assessment be made no later than the 8th July 1
following the July 1 of the assessment year in which the event giving
rise to the supplemental assessment occurred.  This bill would also
specify that there is no limitations period upon the making of a
supplemental assessment if a statutory penalty for fraud is required
to be added to that assessment.
   Existing law with respect to supplemental property tax assessments
provides for the application of property tax exemptions to those
assessments provided, among other things, that, where the assessee is
required to file an application for exemption, the assessee files an
application for exemption for the next following property tax lien
date.
   This bill would, subject to certain exceptions, require, in those
instances in which the filing of an application for exemption is
required, that an assessee file an exemption application or an
amendment to a current exemption application on or before the 30th
day following the date of a supplemental assessment notice in order
to receive a full exemption with respect to that assessment.  This
bill would also specify partial exemption percentages to be applied
against a supplemental assessment, in the case in which a timely
application for exemption is not filed, for various specified
property tax exemptions.  This bill would also specify that the
filing of an exemption claim is not required with respect to the
supplemental tax roll if a supplemental assessment results from (1)
the completion of new construction upon property that has previously
been exempted on either the current, regular property tax roll or the
regular property tax roll being prepared, or (2) a change in
ownership of property where the purchaser of that property owns and
uses or uses, as applicable, property that has been granted any of
certain property tax exemptions on either the current regular
property tax roll or the regular property tax roll being prepared,
and the newly acquired property is put to the same use.
   Existing property tax law generally requires that an escape
assessment be made within 4 years after July 1 of the assessment year
in which the subject property escaped taxation or was underassessed,
but instead specifies a 6-year limitations period for the making of
an escape assessment to which is added a statutory penalty for
evasion or misrepresentation with respect to taxable personal
property.  Existing property tax law provides that these limitations
periods do not commence until July 1 of the assessment year in which
either a change in ownership statement or a preliminary change in
ownership report is filed with respect to the event giving rise to
the escape assessment.
   This bill would eliminate these latter provisions with respect to
the commencement of limitations periods for the making of an escape
assessment.  This bill would also specify, as an additional exception
to the general 4-year limitations period for making an escape
assessment, an 8-year limitations period for an assessment resulting
from an unrecorded change in ownership for which neither a change in
ownership statement or preliminary change in ownership report is
filed with respect to the event giving rise to the escape assessment
or underassessment.  This bill would further require that an escape
assessment be made for each year that a property escaped taxation or
was underassessed if either a statutory penalty for fraud is required
to be added to an escape assessment or a change in ownership
statement with regard to a legal entity is not filed.
   Existing property tax law with respect to assessments made by the
State Board of Equalization provides for the assessment of property,
including the assessment of property on a unitary basis in the case
in which properties are operated as a unit in a primary function of
the assessee.  Existing law also requires the board to mail a notice
of a state assessment between the first day of January and the first
day of June in the case of a unitary assessee, and between the first
day of January and the last day of June in the case of a nonunitary
assessee.  Existing law requires each of these notices to advise the
assessee with respect to a declaration of intent to petition for
reassessment, and also establishes procedures and deadlines for the
appeal of state assessments.
   This bill would eliminate the filing of declarations of intent to
petition for reassessment of state-assessed property, whether that
property is assessed on a unitary or nonunitary basis.  This bill
would allow a petition for reassessment of unitary property to be
filed no later than July 20 of the year of the assessment notice, and
would allow a petition for reassessment of nonunitary property to be
filed no later than September 20 of the year of the assessment
notice.  This bill would also establish a 50-day deadline for filing
a petition for reassessment in the case of an escape assessment.
This bill would also require the mailing of notice of a nonunitary
assessment by the last day in July, rather than the last day of June.

   Existing property tax law with respect to assessments made by the
State Board of Equalization requires the board to allocate assessed
values among the counties in which the assessed properties are
located, and requires the board, upon or prior to its completion of
its assessment roll, to mail notice to each assessee of the allocated
assessed values of the assessee's unitary properties.  Existing law
requires this notice to specify a 5-day period from the date of
mailing of the notice for the assessee to file a petition for
correction of these allocations.
   This bill would require the board to mail notice to an assessee of
allocated assessed values no later than June 15 and require that
notice to advise the assessee that a petition for correction may be
filed no later than July 20 of the year of that notice.  This bill
would also require the board to notify an assessee of a hearing on a
petition for correction of an allocated assessment no less than 10
working days, rather than 5 days, in advance of the hearing. This
bill would further require that a petition for correction of an
allocated assessment be determined by December 31, rather than July
1.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 75.11 of the Revenue and Taxation Code is
amended to read:
   75.11.  (a) If the change in ownership occurs or the new
construction is completed on or after January 1 but on or before May
31, then there shall be two supplemental assessments placed on the
supplemental roll.  The first supplemental assessment shall be the
difference between the new base year value and the taxable value on
the current roll.  In the case of a change in ownership of the full
interest in the real property, the second supplemental assessment
shall be the difference between the new base year value and the
taxable value to be enrolled on the roll being prepared.  If the
change in ownership is of only a partial interest in the real
property, the second supplemental assessment shall be the difference
between the sum of the new base year value of the portion transferred
plus the taxable value on the roll being prepared of the remainder
of the property and the taxable value on the roll being prepared of
the whole property.  For new construction, the second supplemental
assessment shall be the value change due to the new construction.
   (b) If the change in ownership occurs or the new construction is
completed on or after June 1 but before the succeeding January 1,
then the supplemental assessment placed on the supplemental roll
shall be the difference between the new base year value and the
taxable value on the current roll.
   (c) If there are multiple changes in ownership or multiple
completions of new construction, or both, with respect to the same
real property during the same assessment year, then there shall be a
net supplemental assessment placed on the supplemental roll, in
addition to the assessment pursuant to subdivision (a) or (b).  The
net supplemental assessment shall be the most recent new base year
value less the sum of (1) the previous entry or entries placed on the
supplemental roll computed pursuant to subdivision (a) or (b), and
(2) the corresponding taxable value on the current roll or the
taxable value to be entered on the roll being prepared, or both,
depending on the date or dates the change of ownership occurs or new
construction is completed as specified in subdivisions (a) and (b).
   (d) (1) Except as otherwise provided in paragraph (2), no
supplemental assessment authorized by this section shall be valid, or
have any force or effect, unless it is placed on the supplemental
roll on or before the applicable date specified in subparagraphs (A),
(B), or (C) as follows:
   (A) The fourth July 1 following the July 1 of the assessment year
in which either a statement reporting the change in ownership was
filed pursuant to Section 480, 480.1, or 480.2, a preliminary change
in ownership report was filed pursuant to Section 480.3, or the new
construction was completed.
   (B) The sixth July 1 following the July 1 of the assessment year
in which either a statement reporting the change in ownership was
filed pursuant to Section 480, 480.1, or 480.2, a preliminary change
in ownership report was filed pursuant to Section 480.3, or the new
construction was completed, if the penalty provided for in Section
504 is added to the assessment.
   (C) The eighth July 1 following the July 1 of assessment year in
which the event giving rise to the supplemental assessment occurred,
if the change in ownership or change in control was unrecorded and a
change in ownership statement, required by Section 480, or a
preliminary change in ownership report, as required by Section 480.3,
was not timely filed.
   (2) Notwithstanding paragraph (1), there shall be no limitations
period on making a supplemental assessment, if the penalty provided
for in Section 503 is required to be added to the assessment.
   For the purposes of this subdivision, "assessment year" means the
period beginning annually as of 12:01 a.m. on the first day of
January and ending immediately prior to the succeeding first day of
January.
   (e) If, before the expiration of the applicable period specified
in subdivision (d) for making a supplemental assessment, the taxpayer
and the assessor agree in writing to extend the period for making a
supplemental assessment, correction, or claim for refund, a
supplemental assessment may be made at any time prior to the
expiration of that extended period.  The extended period may be
further extended by successive written agreements entered into prior
to the expiration of the most recent extension.
  SEC. 2.  Section 75.21 of the Revenue and Taxation Code is amended
to read:
   75.21.  (a) Exemptions shall be applied to the amount of the
supplemental assessment, provided that  all of the following are
true:
   (1) The property is not receiving any other exemption on either
the current roll or the roll being prepared except as provided for in
subdivision (b).
   (2) The assessee is eligible for the exemption.
   (3) In those instances in which the provisions of this division
require the filing of claims for exemption assessee makes a claim for
the exemption.
   (b) If the property received an exemption on the current roll or
the roll being prepared and the assessee on the supplemental roll is
eligible for an exemption and in those instances in which the
provisions of this division require the filing of claims for
exemption, the assessee makes a claim for an exemption of a greater
amount, then the difference in the amount between the two exemptions
shall be applied to the supplemental assessment.
   (c) (1) If this division requires the filing of claims for
exemption, any person claiming to be eligible for an exemption to be
applied against the amount of the supplemental assessment shall,
except as otherwise provided in subdivision (d) or (e), file a claim
or an amendment to a current claim, in that form as prescribed by the
board, on or before the 30th day following the date of notice of the
supplemental assessment, in order to receive a 100 percent
exemption.
   (2) With respect to property as to which the college, cemetery,
church, religious, exhibition, veterans' organization, free public
libraries, free museums, or welfare exemption was available but for
which a timely application for exemption was not filed, the following
amounts shall be canceled or refunded:
   (A) Ninety percent of any tax or penalty or interest thereon, or
any amount of tax or penalty or interest thereon exceeding two
hundred fifty dollars ($250) in total amount, whichever is greater,
for each supplemental assessment, provided that an appropriate
application for exemption is filed on or before the date on which the
first installment of taxes on the supplemental tax bill becomes
delinquent, as provided by Section 75.52.
   (B) Eighty-five percent of any tax or penalty or interest thereon,
or any amount of tax or penalty or interest thereon exceeding two
hundred fifty dollars ($250) in total amount, whichever is greater,
for each supplemental assessment, if an appropriate application for
exemption is filed after the date specified in subparagraph (A).
   (3) For property for which the welfare exemption or veterans'
organization exemption was available, Section 254.5, other than the
specified dates for the filing of affidavits and other acts, applies
to the application of those exemptions against a supplemental
assessment.
   (4) For property for which the veterans', homeowners', or disabled
veterans' exemption was available but for which a timely application
for exemption was not filed, that portion of tax attributable to 80
percent of the amount of exemption available shall be canceled or
refunded, provided that an appropriate application for exemption is
filed on or before the date on which the first installment of taxes
on the supplemental tax bill becomes delinquent as provided by
Section 75.52.
   (5) With respect to property as to which any other exemption was
available, but for which a timely application for exemption was not
filed, the following amounts shall be canceled or refunded:
   (A) Ninety percent of any tax or penalty or interest thereon,
provided that an appropriate application for exemption is filed on or
before the date on which the first installment of taxes on the
supplemental tax bill becomes delinquent, as provided by Section
75.52.
   (B) Eight-five percent of any tax or penalty or interest thereon,
or any amount of tax or penalty or interest thereon exceeding two
hundred fifty dollars ($250) in total amount, whichever is greater,
for each supplemental assessment, if an appropriate applciation for
exemption is filed after the date specified in subparagraph (A).
   (6) Other provisions of this division pertaining to the late
filing of claims for exemption do not apply to assessments made
pursuant to this chapter.
   (d) For purposes of this section, any claim for the homeowners'
exemption, veterans' exemption, or disabled veterans' exemption
previously filed by the owner of a dwelling, granted and in effect,
constitutes the claim or claims for that exemption required in this
section.  In the event that no claim for the homeowners' exemption,
veterans' exemption, or disabled veterans' exemption is in effect, a
claim for any of those exemptions for a single supplemental
assessment for a change in ownership or new construction occurring on
or after June 1, up to and including December 31, shall apply to
that assessment; a claim for any of those exemptions for the two
supplemental assessments for a change in ownership or new
construction occurring on or after January 1, up to and including May
31, one for the current fiscal year and one for the following fiscal
year, shall apply to those assessments.  In either case, if granted,
the claim shall remain in effect until title to the property
changes, the owner does not occupy the home as his or her principal
place of residence on the lien date, or the property is otherwise
ineligible pursuant to Section 205, 205.5, or 218.
   (e) Notwithstanding subdivision (c), both of the following apply:

   (1) No additional exemption claim is required to be filed until
the next succeeding lien date if a supplemental assessment results
from the completion of new construction on property that has
previously been granted exemption on either the current roll or the
roll being prepared.
   (2) No additional exemption application is required to be filed
until the next succeeding lien date if a supplemental assessment
results from a change in ownership of property where the purchaser of
the property owns and uses or uses, as the case may be, other
property that has been granted the college, cemetery, church,
religious, exhibition, veterans' organization, free public libraries,
free museums, or welfare exemption on either the current roll or the
roll being prepared and the property purchased is put to the same
use.  If a timely application for exemption is not filed on or before
the next succeeding lien date, then the provisions of paragraph (1)
of subdivision (c) apply.  In all other instances where a
supplemental assessment results from a change in ownership of
property, an application for exemption shall be filed pursuant to
subdivision (c).
  SEC. 3.  Section 532 of the Revenue and Taxation Code is amended to
read:
   532.  (a) Except as provided in subdivision (b), any assessment
made pursuant to either Article 3 (commencing with Section 501) or
this article shall be made within four years after July 1 of the
assessment year in which the property escaped taxation or was
underassessed.
   (b)  (1) Any assessment to which the penalty provided for in
Section 504 is required to be added shall be made within six years
after July 1 of the assessment year in which the property escaped
taxation or was underassessed.
   (2) Any assessment resulting from an unrecorded change in
ownership or change in control for which either a change in ownership
statement, as required by Section 480, or a preliminary change in
ownership report, as required by Section 480.3, is not filed with
respect to the event giving rise to the escape assessment or
underassessment, shall be made within eight years after July 1 of the
assessment year in which the property escaped taxation or was
underassessed.  For purposes of this paragraph, an "unrecorded change
in ownership or change in control" means a deed or other document
evidencing a change in ownership was not filed with the country
recorder's office at the time the event took place.
   (3) Notwithstanding paragraphs (1) and (2), in the case where
property has escaped taxation, in whole or in part, or has been
underassessed, following a change in ownership and either the penalty
provided for in Section 503 is required to be added or a change in
ownership statement, as required by Section 480.1 or 480.2 was not
filed with respect to the event giving rise to the escape assessment
or underassessment, an escape assessment shall be made for every year
in which the property escaped taxation or was underassessed.
   (c) For purposes of this section, "assessment year" means the
period defined in Section 118.
  SEC. 4.  Section 731 of the Revenue and Taxation Code is amended to
read:
   731.  Each year between the first day of January and the first day
of June, upon valuing the unitary property of an assessee, the board
shall mail to the  assessee, at its address as shown in the records
of the board, a notice stating the amount of the assessed value of
the assessee's unitary property.  The notice shall advise the
assessee that a petition for reassessment of the unitary property may
be filed not later than July 20 of the same calender year in which
the notice is provided at the headquarters of the board in
Sacramento.
  SEC. 5.  Section 732 of the Revenue and Taxation Code is amended to
read:
   732.  Each year between the first day of January and the last day
of July, upon valuing the nonunitary property of an assessee, the
board shall mail to the assessee at its address shown in the records
of the board a notice stating the amount of the assessed value of the
assessee's nonunitary property.  The notice shall advise the
assessee that a petition for reassessment of the nonunitary property
may be filed not later than September 20 of the same calender year in
which the notice is provided of the headquarters of the board in
Sacramento.
  SEC. 6.  Section 733 of the Revenue and Taxation Code is amended to
read:
   733.
   (a) If a timely petition for reassessment is not filed with the
board, an assessment of unitary or nonunitary property of the
assessee shall become final at the expiration of the period specified
for filing a petition in the notice given in accordance with Section
731 or Section 732.
   (b) The board may extend the period for filing a petition for
reassessment once for a period not to exceed 15 days, provided a
written request for the extension is filed with the board prior to
the expiration of the period for which the extension may be granted.

  SEC. 7.  Section 746 of the Revenue and Taxation Code is amended to
read:
   746.  Each year upon or prior to the completion of the assessment
roll prepared by the board, but not later than June 15, the board
shall mail notice to each assessee at its address as shown on the
records of the board, of the allocated assessed values of the
assessee's unitary property that have been or are proposed to be
placed on the assessment roll to be transmitted to county auditors.
The notice shall  advise the assessee that a petition for a
correction of an allocated assessment may be filed not later than
July 20 of the same calendar year in which the notice is provided at
the headquarters of the board in Sacramento.
  SEC. 8.  Section 748 of the Revenue and Taxation Code is amended to
read:
   748.  Upon receipt of a timely petition for correction of an
allocated assessment, the board shall set a time and place within the
state for a hearing on the petition.  The board shall mail notice of
the time and place for the hearing to the assessee at its address as
shown on the records of the board not be less than 10 working days
prior to the date of the hearing.
  SEC. 9.  Section 749 of the Revenue and Taxation Code is amended to
read:
   749.  Section 743 shall be applicable to hearings on petitions for
correction of an allocated assessment and the board shall notify the
petitioner of its decision by mail.  The decision shall include
written findings and  conclusions of the board if requested at or
prior to the commencement of the hearing.  A decision of the board on
a petition for correction of an allocated assessement shall be
completed on or before December 31 of the year in which the relevant
hearing was held.
  SEC. 10.  Section 758 of the Revenue and Taxation Code is amended
to read:
   758.  If the board roll has been transmitted to the local
auditors, the board  may make an assessment of escaped property or a
roll correction.  At least 30 days prior to transmitting a statement
of assessment of escaped property or making a roll correction, the
board shall notify the assessee whose property's full value has
increased as a result of an escape assessment or roll correction of
the  assessed value of that property as it shall appear on the
corrected roll.  The notice shall be mailed to the assessee at its
address shown in the records of the board.  The notice shall advise
the assessee of the date by which and the place where a petition for
reassessment may be filed.  The date for filing the petition shall
not be less than 50 days from the date of the mailing of the notice
of value.  The provisions of Sections 741 to 744, inclusive, shall be
applicable to petitions and hearings pursuant to this section except
for the dates prescribed for decisions of the board.
  SEC. 11.  Section 759 of the Revenue and Taxation Code is amended
to read:
   759.  (a) If a timely petition for reassessment is not filed in
accordance with the notice provided by the board pursuant to Section
758, an escape assessment or roll correction shall become final at
the expiration of the period for filing a petition for reassessment
specified by that notice.
   (b) The board may extend the period for filing a petition for
reassessment once for a period not to exceed 15 days, provided a
written request for the extension is filed with the board prior to
the expiration of the period for  which the extension may be granted.
